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on Resource Economics |
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Issue of 2023‒05‒29
four papers chosen by |
| By: | Newell, Richard G. (Resources for the Future); Pizer, William (Resources for the Future); Prest, Brian C. (Resources for the Future) |
| Abstract: | We develop a discounting rule for estimating the social cost of carbon (SCC) given uncertain economic growth. Diminishing marginal utility of income implies a relationship between the discount rate term structure and economic growth uncertainty. In the classic Ramsey framework, this relationship is governed by parameters reflecting pure time preference and the elasticity of the marginal utility of consumption; yet disagreement remains about the values of these parameters. We calibrate these parameters to match empirical evidence on both the future interest rate term structure and economic growth uncertainty, while also maintaining consistency with discount rates used for shorter-term benefit-cost analysis. Such an integrated approach is crucial amidst growth uncertainty, where growth is also a key determinant of climate damages. This results in an empirically driven, stochastic discounting rule to be used in estimating the SCC that also accounts for the correlation between climate damage estimates and discount rates. |
| Date: | 2021–06–18 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-21-16&r=res |
| By: | Ewald, Jens; Sterner, Thomas (Resources for the Future); Sterner, Erik |
| Abstract: | Although carbon taxes are generally well accepted in the countries where they have been implemented to lower carbon emissions, there is still public resistance to raising them. We study attitudes toward carbon taxation and other environmental policy instruments in Sweden. We survey a national sample of the population as well as members of a large organization that protests against fuel taxes. Our results show that educational level, rural versus urban domicile, political orientation, and especially trust in government affect opinions on carbon taxes; household income does not appear to matter. Lack of trust in government and lack of belief in the Pigouvian mechanism are especially important motivations for protesters’ opposition. When asked about the use of carbon tax revenue, some respondents support revenue refunding (uniform or progressive), but more people support using it for climate mitigation investments. |
| Date: | 2021–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-21-18&r=res |
| By: | Emanuele Campiglio (Department of Economics, University of Bologna; RFF-CMCC European Institute on Economics and the Environment (EIEE), Milan; LSE Grantham Research Institute on Climate Change and the Environment, London); Alessandro Spiganti (RFF-CMCC European Institute on Economics and the Environment (EIEE), Milan; Department of Economics, Ca’ Foscari University of Venice); Anthony Wiskich (Centre for Applied Macroeconomic Analysis, Australian National University, Canberra) |
| Abstract: | Access to finance is a major barrier to clean innovation. We incorporate heterogeneous and endogenous financing costs in a directed technical change model and identify optimal climate mitigation policies. The presence of a financing experience effect pushes the policymaker to strengthen policies in the short-term, both to shift innovation and production towards clean sectors and to reduce the financing cost differential across technologies, which further facilitates the transition. The optimal climate policy mix between carbon taxes and clean research subsidies depends on the drivers of the experience effect. In our benchmark scenario, where clean financing costs decline as cumulative clean output increases, we find an optimal carbon price premium of 47% in 2025, relative to a case with no financing costs. |
| Keywords: | carbon tax, directed technological change, endogenous growth, financing experience effect, innovation policy, low-carbon transition, optimal climate policy, sustainable finance |
| JEL: | H23 O31 O44 Q55 Q58 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2023:07&r=res |
| By: | B. Kelsey Jack (University of California at Santa Barbara); Seema Jayachandran (Princeton University); Namrata Kala (MIT Sloan School of Management); Rohini Pande (Yale University) |
| Abstract: | Particulate matter significantly reduces life expectancy in India. We use a randomized controlled trial in the state of Punjab to evaluate the effectiveness of conditional cash transfers (also known as payments for ecosystem services, or PES) in reducing crop residue burning, which is a major contributor to the region’s poor air quality. Credit constraints and distrust may make farmers less likely to comply with standard PES contracts, which only pay the participant after verification of compliance. We randomize paying a portion of the money upfront and unconditionally. Despite receiving a lower reward for compliance, farmers offered partial upfront payment are 8-12 percentage points more likely to comply than are farmers offered the standard contract. Burning measures based on satellite imagery indicate that PES with upfront payments significantly reduced burning, while standard PES payments were inframarginal. We also show that PES with an upfront component is a cost-effective way to improve India’s air quality. |
| Keywords: | India, Life Expectancy, Payments for Ecosystem Services, PES |
| JEL: | O13 Q01 Q56 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:307&r=res |